Still painful after all these years ... Greta Garbo plays the suicidal Anna Karenina with her son in the 1935 Oscar-winner. Photograph: Hulton Getty

"One of the greatest tragedies of my life," wrote Oscar Wilde in his 1889 essay The Decay of Lying, "is the death of Lucien de Rubempré. It is a grief from which I have never been able completely to rid myself. It haunts me in my moments of pleasure. I remember it when I laugh."

Such were remarks Wilde penned not on a flesh and blood acquaintance but on one of Balzac's most exquisite characters, the fragile poet/arriviste first seen ground up and spat out by the human grinder that is the 19th century Parisian society of Lost Illusions. De Rubempré resurfaces later in the magnificent A Harlot High and Low, only to hang himself with a silk cravat in the dungeons of Paris's Conciergerie. Leaving aside a fictional destiny of boom and bust that foreshadows, in a sense, Wilde's own, one could construe his remarks above as typical - an arch, even camp, witticism on nothing more than a book he was fond of.

Then again, Borges, a great admirer, said of Wilde that he "was a profound man who tried to seem frivolous." So perhaps we should leave our chortles aside and take Wilde at his word - that the death of a fictional character is a bereavement as intense as that of any friend or member of one's family.

Readers might well balk at this idea. In an average week, it is helpful to distinguish between that which we experience with our five senses, and that which goes on between the covers of a book. Healthy society agrees that to mix fiction and reality makes for a bad life cocktail. Fiction, as American author John Gardner had it, is one "vivid and continuous dream". And life not.

Fine, but if we look at the question of memory, and how we remember events, such a distinction doesn't quite hold. I'm thinking here of American psychologist Elizabeth Loftus, whose research with patients who have mistakenly believed themselves to be victims of abuse, or, in certain cases, are convinced they have been abducted by aliens, has raised the question as to whether our memories themselves are not fictions. One can disregard the extent to which a delusional patient may recall events that never happened, but what is one to make of the case of American actor Alan Alda who, invited to a picnic by Loftus's disciples, refused a plateful of hard boiled eggs, invoking a childhood memory that the mischievous memory experts had seeded earlier, on inviting him to complete a questionnaire?

You may argue that actors are suggestible fellows, but even so Loftus's research leads us down some troubling paths, not just in that field of the dodginess or not of legal testimony she specialises in. The Alda incident suggests that our memory is something malleable, can produce new narratives according to circumstance. We might then wonder the degree to which the "real" life we recollect is something of an exercise in creative writing. I am not suggesting here that we are lying all the time - though most of us, when drafting a CV, for instance, must tax to a certain extent our myth-making capacities. Rather, Loftus's research points to something akin to an instinct by which our remembered lives are like a novel we write and rewrite.

I'm not quite sure this demeans us. Doesn't fiction often seem like a higher reality? Concerning Balzac, Wilde went on to say that he " reduces our living friends to shadows, and our acquaintances to the shadows of shades." Perhaps we unconsciously rework our memories because reality is often more insubstantial than fiction. There can be nothing more flattering, after all, than to be told that one's life is like a book. Wilde, even to the last hours of his merry and tragic life, strove for fictional effects, wishing to rewrite the hideous wallpaper out of his deathbed scene in the Latin Quarter's Maison du Perier. His earlier grief for the passing of Lucien de Rubempré was all too visceral because Lucien was all too alive. Not fiction, but our life, as the rowing boat rhyme goes, is a dream.